IPO-SCAM 2 LST

The scam in 21 IPOs, which were investigated, related to
alleged cornering of shares reserved for retail investors by
scamsters through opening of fictitious accounts.

The committee said for the purpose of payment to the
deprived retail applicants, the amount which is the difference
of closing price of shares on the first day of listing/trading
at NSE and the IPO issue price will be considered.
"These applicants will not be entitled for the market
price movements subsequent to the listing," said the committee
headed by former Supreme Court judge D P Wadhwa.
It recommended that those who did not get any shares
should be reallocated money equally from the recovered amount,
till they each receive the gains from minimum shares allotted
to the lowest category in the IPO.
Once that number is reached, any left-over money shall
"spill over" and would be reallocated to the partly successful
applicants, the committee added.
"This would help bring back investors' confidence. He
would know that if he is cheated, the fraudsters are not only
punished but his loss is also compensated," Haldea said.
Unlike the IPO demat scam case, where identifying the
victims is relatively easy, there are numerous frauds where
fraudsters, if caught, get punished but the deprived lot is
not compensated as they are difficult to identify, he said.
Former Finance Minister P Chidambaram had assured Lok
Sabha (Lower House of Indian Parliament) that steps would be
taken to reallocate shares to people who had lost out on
allocation of shares on account of the IPO scam. PTI MG
ANU


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